A level playing field is key to global steel trade remaining open while the industry undertakes the challenge of decarbonisation, worldsteel director general Edwin Basson said at Tuesday’s Singapore Green Steel Forum attended by Kallanish.

The harmonised measurement of carbon dioxide emissions and reduction, common principles for standards and branding, such as mass balance approaches, and the fair trading of steel amid decarbonisation efforts are being discussed, he noted.

Measurement approaches developed by worldsteel over the past 20 years are becoming the basis for the future harmonised measurement, he added. The G7 and G20 countries are currently discussing harmonised measurement approaches in emissions and these require new agreements on boundary conditions, among other details.

Many steel producers are marketing their own brands of decarbonised steel using mass balance approaches. In most cases, CO2 savings in one part of the production process are bundled together and made available in the form of CO2 savings certificates for products produced in another part of the production process. Harmonised principles have been agreed by worldsteel members and will be used to develop formal guidelines, Basson told Kallanish. This will ensure that decarbonisation is promoted in a responsible, transparent way.

The trading of steel has always been open, with 30-40% of output traded between regions. A fair and open system of trade is therefore necessary. “For this to be maintained, we need a rules-based trading environment that ensures a level playing field between producers in different countries,” Basson noted.

The WTO must be at the centre of this process, he added. Countries around the world are working on developing new trade rules, such as the EU's CBAM, that will take account of emissions and, in some cases, the cost of carbon and decarbonisation efforts in steel production.

Global steel output could see 20-25% growth to 2.4-2.6 billion tonnes by 2050, depending on assumptions around circularity. Most steelmaking countries have committed to having net zero emissions by that time. The global steel industry has set a target for a 50% reduction in emissions by 2050.

Limited ferrous scrap and direct reduced iron feedstock supply can only sustain around 50% of projected global steel production by 2050. Given the industry will continue to rely on the integrated BF/BOF route to meet around 50% of total steel demand, existing technologies must also reduce their CO2 intensity. Asia will remain BF-BoF dominated, including China, India, Japan, Korea and ASEAN. For China, the EAF share of steel production could grow over the next ten years to 30% from 10% currently.

The shortage of hydrogen for steelmaking is another challenge for the industry, as are problems with hydrogen storage and transportation. Basson also noted that less carbon-intensive steelmaking will require additional energy to replace met coal as an energy carrier. This could however prolong the requirement for coal in the electricity industry.

Worldsteel recognises that decarbonisation will take time, be expensive and also require significant change in supporting industries such as energy. Despite the challenges, Basson concluded: “I am optimistic that we will begin to see examples in the integrated route with significantly lower carbon-dioxide intensity in the foreseeable future.”